Record ad spending cuts Procter & Gamble income

Procter & Gamble Co. is betting that heavy advertising will draw budget-conscious households to new products, even those with higher prices, as it tries to build sales and market share in a tough economy.

The consumer products maker reported Tuesday that net income fell 12 percent in its fourth quarter, largely because of company-record spending on marketing. Revenue rose 5 percent, and the company expects continued growth during the next year.

Smaller rival Clorox Co. also said more spending on promotions, and tough competition, took a bite out of fourth-quarter results. The maker of its namesake bleach and Glad trash bags said net income was nearly flat, even though revenue was up 1 percent.

 

Shares jump as Pfizer posts 9 percent increase in profit

Pfizer Inc. on Tuesday reported a 9 percent rise in second-quarter profit, trouncing Wall Street expectations as revenue jumped 58 percent due to favorable currency rates and its mega-acquisition of fellow drugmaker Wyeth last October.

Shares jumped 5 percent on the surprisingly strong report.

The maker of the cholesterol blockbuster Lipitor and the impotence pill Viagra said net income for the three months ended July 4 rose to $2.48 billion, or 31 cents per share. A year ago, income was $2.26 billion, or 34 cents a share.

Pfizer, the world’s biggest drugmaker by sales, reported revenue of $17.33 billion, up from $10.98 billion last year, mainly due to $5.4 billion from Wyeth products.

 

Barnes & Noble considers putting itself up for sale

Book retailer Barnes & Noble Inc. said its shares have slumped so low it may put itself on the block — possibly selling the chain to an investment group that would include its founder and biggest shareholder, Leonard Riggio.

The world’s largest bookseller said late Tuesday that its board is evaluating several options to boost shareholder value in the face of a depressed stock price, including selling the company.

Riggio, who holds about 28 percent of the company, said he’s considering joining an investor group to buy the retailer.

 

Dow turns quarterly profit, but market unimpressed

Wall Street is wondering if Dow Chemical Co. has been too optimistic in its profit forecasts after second-quarter results fell short of expectations.

The nation’s largest chemical maker said Tuesday that increased demand and higher prices for chemicals helped it swing to a profit from a year-ago loss. Dow earned $566 million, or 50 cents per share in the second quarter, after paying preferred dividends. That compares with a loss of $486 million, or 47 cents per share, a year earlier.

But the results fell below the expectations of analysts. Dow Chemical shares dropped 9.2 percent to $25.72. S&P Equity Research cut its 12-month price target for Dow to $30 from $34 after the results were released.